A brief report on the proceedings of the National Workshop on Capacity Development for CDM in the Philippines
The National Workshop on Capacity Development for CDM for the Philippines was held on 10-11 December at Eugenio Lopez Center, Antipolo City, Manila, Philippines. The workshop was attended by more than 40 participants representing various target groups and stakeholders (NGOs, private sector, development banks, energy companies, etc.). Dr. Subhes Bhattacharyya of AIT participated in the workshop on behalf of the Regional Centre.
The workshop was inaugurated by Father Daniel McNamara, Director, Manila Observatory at 9 AM on 10th December 2002. Father Yap presented the workshop objectives and agenda while Dr. Subhes Bhattacharyya of AIT welcomed the participants and introduced the project and its tasks.
After welcome and introduction session, Ms. Joy Goco of IACCC presented an overview of the UNFCCC, the Kyoto Protocol and the CDM. Father Yap then presented the CDM project cycle and introduced the work plan. He explained how each task identified in the work plan is related to the project cycle and why the task is required.
Ms Laurie Navarro then presented in detail the need for establishing a CDM National Authority, its possible structure, its functions and the process of setting up such an authority in the Philippines. This task is being carried out under an UNDP project, also funded by the Dutch and Ms Navarro is the consultant for the UNDP project. To avoid possible overlaps, the present project excluded the task of establishing the NCA but the capacity development aspect of the NCA is still required. A number of questions, clarifications, suggestions were made in the open forum discussion regarding the NCA. The participants were of the opinion that a pragmatic and least-resistant path has to be chosen to set up the NCA and if required an interim NCA could be set up by reorganizing the existing set up. Different views were expressed about expanding IACCC to include private sector participants and others. Some however suggested that expansion of present bureaucratic system would mean delays in decision-making by the NCA. Others observed that IACCA has functioned well in the past (for example in the case of GEF projects) and should be considered for setting up an operational NCA at the earliest.
The post-lunch session was devoted to four case studies – mini hydro, micro hydro, PV-solar and fuel switching. Each case study presented the view of the developers and the barriers they face in developing projects. The speakers highlighted existing regulatory practices (such Grid Code requirements), tariffs (e.g. wheeling charges, PPA rates), legal provisions and financial constraints for mini/ micro hydro projects. Concerns were also expressed regarding the ability of these small-sized projects to attract CDM investment at a low transaction cost. The speakers also highlighted the capacity needs for various aspects of the project development – project formulation, baselines, validation, and monitoring.
The panel discussion on the case studies showed some disenchantment within the participants about the prospect of the CDM. Some participants expressed skepticism about the investment that would generate through CDM and its real impacts. It is dawning on the participants that CDM would not finance the entire projects but only the incremental costs. This made some participants less enthusiastic about the CDM.
On the second day, Mr. Pim Kieskamp of ADB presented the financial aspects of the CDM projects and remarked that the CDM projects are not very different from other investment projects except the requirements for rigorous documentation, verification and monitoring procedures. From the financial point of view, CDM projects would involve additional risks as the projects are marginal projects and large point sources of emissions appear to be attractive options for investors. He also indicated the potential market size for CDM and suggested that developing Asia has a big potential but the it is an urgent need for them to set up internal arrangements so that CDM projects can generate CERs within the target time period.
Ms. Nieves Osorio, Undersecretary, Department of Finance, talked about the government sources that could be tapped for CDM activities. She indicated that the government does not want to expand the bureaucracy given the budget deficit and the government may not be able to provide funds directly through budgetary support but it may be possible to utilize the Special Funds created by the legislature under various Acts. She also suggested that the Investment Coordination Committee should be contacted and CDM issues can be discussed with them.
Mr. Rey Guerin, VP, Development Bank of Philippines made the last presentation of the morning session of the second day. He touched upon a number of issues – project evaluation by the banks, costs of project preparation, the procedural aspects, etc. He indicated that DBP is working to establish a cell to deal with CDM projects.
In the post lunch session, Dr. Yap reminded the participants about the elements of the work plan and suggested that two groups would be formed to discuss the various aspects of the work plan. Each group was given an hour to discuss and formulate their views. The rapporteurs of each group presented the results of the discussions in a plenary session.
Group 1 felt that the ten tasks identified in the work plan could be reorganized into four broad groups as follows:
Task 1: Information Campaign and Awareness Raising
Task 2: Capacity Development
A. Government officials/ Policy makers
a. Senior level
b. Medium level
B. Project Developers
C. Project Financiers
Task 3: Establish and Develop Capacity of the National CDM Authority
Task 4: Create a Pipeline of CDM projects
a) Investment promotions
The regrouping of the tasks would help avoid overlaps and repetitions and also would make the project manageable. The group also suggested certain specific changes to the proposed work plan.
Group 2 believed that the project should focus on the following three priority tasks:
Task 1: Information Campaign and Awareness Raising
Task 2: Capacity Development for Senior Policy makers
Task 3: Establishment of National CDM Authority
Under each of these tasks, the group specified some tasks and raised certain issues.
Based on the comments and suggestions received during the workshop, CCIC shall be revising the work plan and would circulate to the interested participants for information. The revised work plan would be discussed with IACCC and the agreed plan would be presented at the regional workshop to be held in January 2003.
a) Clearly, the national focal point did the groundwork and prepared the draft work plan in detail. It also prepared some background papers and the entire material was made available to the participants. Materials used for presentations were also made available during the course of the workshop.
b) All the presentations and discussions took place in English language. The Philippines does not envisage translating the training documents in the local language.
c) There is some amount of disenchantment among the stakeholders about the potential benefits of CDM. This can act as a barrier in pushing CDM further. Clear messages about CDM potential and benefits would be required to convince the policy makers and legislators to build pressure for KP ratification and other requirements.
d) The focal point has attempted to bring together various stakeholders – industry, private players, banks, government and NGOs. Apparently, there was no participant from the Dutch embassy.